The markets failed to break the previous high and are back in the 8640-8850 trading range. There are several scenarios which can happen from here and let us take a look at each of them.
1. Corrections are always 3 legged, 2 legs down sandwiching 1 leg up aka ABC correction. As per this we are in tricky B wave which may be over or may get over at anytime. First leg down was 280 points till 8688 from 8968.Second leg up till 8893 a retracement of 73 pc and a final leg down till 8613,8537 or 8440.
2. The second alternative is that the markets go straight up. A break of 8968 will lead to test of fresh new highs.
3. We continue this range bound exercise for few days more. A break of 8640 can lead to 8440 and a break of 8850 will lead to 9050. Note the significance of plus minus 200 points, 8440 is a significant support and 9119 is a significant resistance.
4. The results season will start in 2 weeks and the results month is usually a range bound month.
The most likely scenario is some correction and then fresh highs by Diwali. This will fulfill the rangebound criteria as the same levels will be traversed in both up and down directions.
Buying on dips and booking profits partially is the best choice in the current scenario. Global cues will be benign for sometime to come.
1. Corrections are always 3 legged, 2 legs down sandwiching 1 leg up aka ABC correction. As per this we are in tricky B wave which may be over or may get over at anytime. First leg down was 280 points till 8688 from 8968.Second leg up till 8893 a retracement of 73 pc and a final leg down till 8613,8537 or 8440.
2. The second alternative is that the markets go straight up. A break of 8968 will lead to test of fresh new highs.
3. We continue this range bound exercise for few days more. A break of 8640 can lead to 8440 and a break of 8850 will lead to 9050. Note the significance of plus minus 200 points, 8440 is a significant support and 9119 is a significant resistance.
4. The results season will start in 2 weeks and the results month is usually a range bound month.
The most likely scenario is some correction and then fresh highs by Diwali. This will fulfill the rangebound criteria as the same levels will be traversed in both up and down directions.
Buying on dips and booking profits partially is the best choice in the current scenario. Global cues will be benign for sometime to come.
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